UPDATED: Strickland puts out slots analysis, says no decision made

Tuesday

Sep 29, 2009 at 12:01 AMSep 29, 2009 at 5:10 PM

Gov. Ted Strickland today released a doomsday analysis of how state funding for education would be affected if the $851.5 million that was expected to come from video slot machines for the current two-year budget doesn't materialize.

Gov. Ted Strickland today released a doomsday analysis of how state funding for education would be affected if the $851.5 million that was expected to come from video slot machines for the current two-year budget doesn't materialize.

The analysis shows that besides having to cut the $851.5 million that had been budgeted from the slots, the state also would potentially lose up to $1.5 billion in federal stimulus funds for primary, secondary and higher education as well.

That's because without the slots money, the state would not be able to meet federal requirements to maintain spending levels from previous years needed to get the stimulus funds for education.

As a result, $2.3 billion would have to be cut from education in the two-year budget, or 10.31 percent in fiscal 2010 and 15.74 percent in fiscal 2011. Columbus schools, for examble, would lose $60.4 million over the biennium, the analysis said.

Another option could be for the state to seek a waiver from the federal government for the "maintenance of effort" requirements to maintain spending levels in order to qualify for the federal stimulus dollars.

But under that scenario, federal rules require that the stimulus money would have to be used first to cover any shortfall in education spending in the first year of the budget. That would avoid a deficit in fiscal 2010, but the entire shortfall would have to be made up in fiscal 2011.

That would mean, without any additional revenue, there would be an across-the-board reduction of 10.67% per district in primary and secondary education in fiscal 2011, and the Ohio Board of Regents would face a shortfall of of $197.3 million, the analysis said.

The slots revenue is in jeopardy, of course, because the Ohio Supreme Court ruled last week that the state's plan to add slots at horseracing tracks is subject to a referendum -- meaning the plan could face an up or down vote in November 2010, effectively making it impossible to generate the $851.5 million planned for the two-year budget that ends June 30, 2011.

So why is the governor putting out this analysis, when no one really expects the response to the court decision will be to scrap the slots plan and cut education funding instead of finding some other way to maintain that funding?

The official statement is: "The governor asked the Department of Education to provide an impact analysis as part of the ongoing review of the court’s decision. He is committed to doing everything possible, as quickly as possible, to protect primary and secondary education because the future of the state’s economy depends on how well we educate Ohioans.”

Perhaps the idea it to put pressure on Senate President Bill M. Harris, R-Ashland, and Senate Republicans to come to the table and join Strickland in efforts to find a solution to the slots problem. Harris so far has said he's waiting for Strickland to make the first move.

But Harris said after session today that he had not seen the analysis and that he will be "glad to talk with the governor and work with him on different issues he recommends."

“I have not talked to the governor yet so I don't know what his plans are," Harris said.

When asked whether he sees a scenario in which schools are cut by $2.3 billion, Harris replied, “Since I don't know how the governor will go about that, I would prefer to not answer that until I get a chance to talk to him and get an idea of how he plans to implement what the procedure is.”

Strickland's office stressed that no decision has been made, including whether to seek a waiver. There's also no timetable for making a decision, spokeswoman Amanda Wurst said.

Stay tuned.

Dispatch reporter Jim Siegel contributed to this posting.

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